The company’s budgeted sales for the coming year are P30,000,000 of which 70% are expected to be credit sales at terms of n/30. It estimates that a proposed relaxation of credit standards will increase credit sales by 30% and increase the average collection period from 20 days to 30 days. Based on a 360-day year, the proposed relaxation of credit to standards will result in an expected increase in the average accounts receivable balance of?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
The company’s budgeted sales for the coming year are P30,000,000 of which 70% are expected to be credit sales at terms of n/30. It estimates that a proposed relaxation of credit standards will increase credit sales by 30% and increase the average collection period from 20 days to 30 days. Based on a 360-day year, the proposed relaxation of credit to standards will result in an expected increase in the average
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